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Chase Freedom Unlimited Scraps 3% Rate in First Year

The cash-back card is going back to a traditional cash sign-up bonus, and all purchases will earn 1.5% cash back from Day One.
Oct. 10, 2019
Cash Back Credit Cards, Credit Cards, Promos
Chase Freedom Unlimited Scraps 3% Rate in First Year
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The Chase Freedom Unlimited® has ended its 3% cash-back experiment after six months and is going back to a traditional cash sign-up bonus.

Chase’s popular cash-back card has always paid 1.5% cash back on purchases, but it has experimented with different bonus offers to try to entice customers. In April 2019, it began offering a bonus rate of 3% cash back on the first $20,000 in purchases during the first year your account is open, then 1.5% on everything after that.

The 3% offer has been eliminated as of Oct. 10, 2019. In place of the higher rate in the first year, new cardholders can now claim a lump-sum cash bonus: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.

The new bonus is actually the same offer that was in place before the 3% promotion.

 Previous offer
(before Oct. 10, 2019)
New offer
(starting Oct. 10, 2019)
Rewards rate • 3% cash back on up to $20,000 in purchases in the first year.
• 1.5% cash back on all other purchases.
• 1.5% cash back on all purchases.
Upfront sign-up bonusN/A.Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.

The revised bonus offer is a better deal for smaller spenders — people who plan to put less than $10,000 on the card in the first year. Assuming they earn the bonus, such cardholders will collect more in total rewards than they would have under the 3% offer. It’s a worse deal for those who spend more than $10,000; they would have come out ahead with the 3% versus 1.5% plus $150.

There had been hints that the 3% bonus offer was on the way out. In August 2019, Chase removed the 3% offer from its own website and replaced it with a $200 cash bonus offer, but the 3% bonus remained available on other sites, including NerdWallet.

The Chase Freedom Unlimited® is making one other significant change: The balance-transfer fee is increasing to 5% of the amount transferred (minimum fee: $5). That’s a significant increase from the previous fee of 3% (minimum $5). The 3% fee combined with a lengthy 0% intro APR period had made this card a pretty good stealth option for balance transfers.

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